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Q1. If a company has not declared dividend since last 8 years and is building up reserves for further investments and growth. Does this act of the company amount to Oppression or mismanagement
No, Non declaration of dividend does not amount to misappropriation and oppression
Yes, Non declaration of Dividend results in loss to the shareholders and is against their interest.
Yes, if the shares are devalued.
None of above.
Q2. When can a Central Government make a complain to the Tribunal under Section 241
The affairs of the company have been or are being conducted in the manner prejudicial to public interest
The affairs of the company have been or are being conducted in the manner prejudicial to public interest
The affairs of the company have been or are being conducted in the manner prejudicial to interest of the company
The affairs of the company have been or are being conducted in the manner prejudicial to interest of the company
Q3. What were the takeaways from the recent petition of minority shareholders Cyrus Investments Private Limited and Sterling Investments Corporation Limited of TATA Sons Limited alleging acts of oppression and mismanagement in the conduct of affairs of TATA sons Limited?
Sections 241 and 242 are for preventive reliefs (not declaratory) to arrest the malafid e ongoing in a company
To invoke the jurisdiction of the Tribunal under section 241, the company must be a going concern, there must be an action in progress and the action should be oppressive or prejudicial to any of the members complaining or the company. If these elements of section 241 are complied with, the Tribunal will then ascertain whether the proved facts would justify the winding-up of the company on just and equitable grounds. Lastly the Tribunal must arrive at the finding that the winding- up of the company on just and equitable ground would unfairly prejudice the member. Only once this entire process is achieved, the Tribunal can then pass relief under section 241 for oppression and / or mismanagement.
Mere unfairn ess of the action complai ned of is enough to invoke section 241
Bot h (a) & (b).
Q4. The Board of directors of Say Limited have indulged in the following acts. Whether the be said to be mismanagement : (i) Not filing documents with Registrar of Companies (ii) Sale of assets at glaringly low price. (iii) Violations of provisions of law and of memorandum or articles of association. (iv) Application of company finances.
i), (ii) & (iv) are mismanagement
(ii), (iii) & (iv) are mismanagement
(i), (ii) & (iii) are mismanagement
All are mismanagement
Q5. MJK Private Limited has two group of shareholders, one foreign shareholders holding 55% and one Indian shareholders holding 45% of the shares of the company. The AOA provides for the terms of mutual understandings of both the groups. Both the groups have equal managerial powers. The relationship between two groups could not last longer and disputes arose leading to deadlock in management. The Indian Group complained to NCLT for action against the foreign group for oppression. Whether the case amounts to oppression or winding up under the act
Both the groups being equally strong one is unable to oppress the another, hence there is deadlock in management but not oppression
Foreign group can be said to be oppressive over the Indian group.
The above case is not tenable under the provisions of oppression.
Both (a) & (c).
Q6. When can a member make a complain to the Tribunal under Section 241:
The affairs of the company have been or are being conducted in the manner prejudicial to public interest
affairs of the company have been or are being conducted in the manner prejudicial or oppressive to such member or any other member
The affairs of the company have been or are being conducted in the manner prejudicial to interest of the company
All of the above
Q7. Can a Tribunal consolidate similar applications prevalent in any jurisdiction and appoint a lead applicant in order to save its time and dispose off the proceedings faster
Yes but only of same jurisdiction
No
May be
Yes
Q8. A Company appointed Mr. Jay as Managing Director of the company without sending proper notice of AGM. Petitioner claimed that such appointment is Null and Void. Is It Correct?
Yes, if there is no proof of sending notice of AGM and filing of requisite forms for appointment of managing director, the appointment shall be null and void.
No, if the it is proved that the notice for AGM was sent and requisite forms are filed
No, if it held that majority shareholders had proposed and seconded the agenda in the AGM.
Both (a) & (C)
Q9. Removal of Mr. Alok from the post of director of Jai Private Limited without giving sufficient reasons have made Mr. Alok to file a petition under this section for oppression. Can Mr. Alok do so?
Yes, Mr. Alok can file a petition since his removal is unjustified.
Yes, Mr. Alok can file a petition since he feels that it is prejudicial to the interest of companies as other directors have a strategy to take undue advantage which Mr. Alok had opposed to.
No, Mr. Alok cannot file a petition under this section since he is not a shareholder/member
Both (a) & (b).
Q10. Members and depositors have filed class action suits for the same cause of action differently. Will both the application be accepted
No, only a single class action suit is allowed for a same cause of action.
Yes different class action suit can be filed by different interest groups
All of above
None of above
Q11. The Tribunal gave an order of terminating of agreement under Section 242 to ABC Limited. Advice the company what will be the consequence on the directors, managing director or manager due to the order of Tribunal with respect to their role In the company
Q12. Whey Private Limited was incurring losses since its incorporation and has not been able to meet the expectation of the shareholders. The shareholders feel that the operations of the company are mismanaged by the authority and have filed a petition under this section. Is the allegation valid?
Yes since shareholders have invested in the company with an expectation to earn returns.
No merely because company incurs losses it cannot be said to be mismanaged by the authority.
Yes if it is proved that the losses have occurred due to mismanagement
Both (b) & (c).
Q13. POQ Limited allotted shares without proper application and notice of board meeting. The majority shareholders claimed that this was done to reduce the majority shareholders to minority. Petition was filed by majority shareholders for oppression. What should be the ruling in such case?
Since No money was received by POQ Limited from the allottees and the respondents did not furnish any details relating to the allotment made and no application for the allotment was made. It is to be held that no shares could be allotted without a formal application. No shares could be allotted as the petitioners constitute majority in the board. The allotment of shares was accordingly to be cancelled
Further issue of shares does not amount to oppression
Further issue of shares amounts to oppression if the proper procedure has not been complied with.
Both (a) & (c).
Q14. Does NCLT have powers to grant relief even if the complainant does not make out a case for oppression and mismanagement? The Case of Needle Industries is an example of the powers of the NCLT (Formerly CLB).
Yes the NCLT can grant a relief even if the complaint does not amount of oppression since the NCLT is not powerless to do substantial justice between the parties.
No NCLT cannot provide relief in any other cases
All of above
None of above
Q15. Jack Private Limited appointed new directors and removed the existing directors from the board. Can it be challenged in a petition under this section
Yes if the directors were removed without a justified reason
No, change in the board does not amount to misappropriation or oppression. It is only when the new directors misconduct the affairs of the company than it can be said that they had been working to the prejudice of the company
Yes such change has prejudicially affected the interest of the company or the general public interest.
Both (a) & (b).
Q16. XYZ Private Limited has been experiencing liquidity crisis which has majorly hit its operating cycle. The company is unable to pay its debt obligations. In order to protect the interest of creditors an arrangement was made to issue shares in lieu of their amount due and to appoint them as directors. Does it amount to mismanagement or oppression?
No, since the arrangement was in bona-fide interest of the company
Yes it results in dilution of control of the existing shareholders and hence against their interest
Yes since the creditors would be appointed as directors they will have the power to take decisions which works in their favour
Both (b) & (c).
Q17. Taking the above case, What will be consequences if he continues to act as managing director even after termination of the agreement by the tribunal
Imprisonment upto 1 year
Fine of Rs 1,00,000
Imprisonment of 6 months and Fine of Rs 5,00,000
Imprisonment up to 6 months or fine of Rs 5,00,000 or both
Q18. The 20 members out of 200 members of ABC Ltd. a company having share capital has authorized Mr. A to make an application to the Tribunal under section 241.Where this 20 members hold 5% of the authorised share capital and 9% of issued share capital. Mr. A made an application on to Tribunal. Is the application of Mr. A valid according to Companies Act
Yes application by Mr. A, authorized by other members is valid under the act and also requirement of minimum number is satisfied
No the criteria of minimum number of members making an application is not complied with and hence application is not valid
Only Central Government can make an application and hence the application by Mr. A is not valid
None of above
Q19. In Pork Private Limited, the managing director was removed pursuant to an order passed by the tribunal under section 242 in the year 2015. Can the person be appointed as manager in the year 2019?
Yes, if the person takes leave from the tribunal
No, he cannot be appointed
Yes, he can be appointed after a period of 5 years has elapsed from the date of termination of such agreement
Both (a) & (c).
Q20. What are the consequences if a group of members have formed an alliance to stop the company from entering into an agreement which they are not interested and hence have made frivolous objections and filed an application to the tribunal to abstain the company from entering into the agreement?
The Tribunal may accept the application and pass an order abstaining the company from entering into the agreement
The tribunal after investigation with reasons to be recorded in writing reject the application and pass an order to the applicant to pay a cost to the opposite party not exceeding of Rs 1,00,000
The tribunal will reject the application with reasons in recording
The tribunal will not accept the application
